lever brothers ltd

Lever Brothers Pakistan Limited

Table of ContentsWhat the UniLever Is?______________________________________________________ Lever Brothers Pakistan Limited_____________________________________________Mission Statements____________________________________________________________

Product Lines of Lever Brothers Pakistan Limited_______________________________ PRODUCTION UNITS_____________________________________________________ Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)_______________________ History__________________________________________________________________Unilever_____________________________________________________________________ Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)_________________________

Organization Structure_____________________________________________________Company Information:_________________________________________________________ Management Activities in Lever Brothers Pakistan Limited__________________________Path to Growth______________________________________________________________________ TPM______________________________________________________________________________ 5 Ss of Workplace Organization._______________________________________________________

Managerial Hierarchy of Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)_ Operations of Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)___________Material Store________________________________________________________________

Buying Department________________________________________________________ SUPPLY CHAIN MANAGEMENT___________________________________________ FORECASTING__________________________________________________________ Cost Department__________________________________________________________ Payment Department_______________________________________________________ Employees Relations Department_____________________________________________ INTERNSHIP REPORT 1

Lever Brothers Pakistan Limited ADMINISTRAITION DEPARTMETNT_______________________________________ DISTRIBUTION__________________________________________________________ QUALITY CONTROL______________________________________________________ OBJECTIVES____________________________________________________________ Financial analysis_________________________________________________________ SWOT Analysis___________________________________________________________Strengths_____________________________________________________________________ Weakness____________________________________________________________________ Opportunities_________________________________________________________________ Threats______________________________________________________________________

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What the UniLever Is?Unilever is dedicated to meeting the everyday needs of people everywhere. Around the world UniLever foods and home and personal care brands are chosen by many millions of individual consumers each day. Earning their trust, anticipating their aspirations and meeting their daily needs are the tasks of UniLever local companies. They bring to the service of their consumers the best in brands and both UniLevers international and local expertise. For more than 70 years Unilever has been providing consumers with quality products and services. UniLever has a portfolio of global, regional and local brands. Some, such as Bertolli, Dove, Hellmanns, Lipton, Lux, Magnum, Omo and Vaseline, are popular around the world. Others are the first choice for consumers in particular countries. As traditional structures and lifestyles around the world are being rapidly transformed, Unilever continues to respond to consumers present needs and, at the same time, to anticipate their future ones. Our strength lies in the deep understanding we have of local culture and markets. Unilevers strategy is to focus research and development and marketing on our top performing brands, that is, those that are most in demand from consumers. Through our extensive knowledge of trends identified today, we will continue to develop our brands to meet the needs of our consumers tomorrow. , feel and smell great. UniLever products are at home everywhere: favorites with consumers throughout the world, from the emerging markets of Asia and Latin America to the developed economies of Western Europe and North America. UniLever meets the needs of consumers around the world, in both new and established markets. Consumers vary from country to country in their preferences and habits and INTERNSHIP REPORT 3

Lever Brothers Pakistan Limited UniLever adapt many of its brands to suit local tastes. For example, among UniLevers many teas, it produces around 20 separate brands of black tea specifically tailored for consumption in over 20 different countries and UniLever is constantly sharpening the flavors to suit all its local markets. In some societies, consumers have traditionally washed up by sponging ash, sand or detergent onto their dishes, before rinsing. Learning from these established practices, we developed our Vim dish wash bar, to bring improved cleaning to existing washing routines. Shopping habits also vary and the availability of our brands is a key concern of local managers. UniLever adapt the distribution of its brands to suit local realities. In Europe, customers benefit from swifter, easier dispatch through online ordering of frozen foods. While, in Tanzania, UniLever has piloted bicycle delivery of products to villages inaccessible to motor transport. Building on a presence that in places stretches back nearly a century, it keeps closely in tune with local consumers. UniLever is, in every sense, a multi-local multinational. Unilevers research and development teams help to anticipate and meet consumer needs. UniLevers research and development expertise allows to anticipate the evolving needs of consumers and to create the innovations to meet them. Internet technology is improving the way UniLever share best practice and innovation around the world. UniLevers R&D activity is focused on six major laboratories and a network of innovation centers around the world. Recent successes have demonstrated UniLevers practical ability to respond to consumers and bring innovations to the marketplace. They include laundry tablets, which it has rolled out in more than 30 countries; Lipton Cold Brew tea bags, which take away the need to boil water when making ice tea; and its cholesterol-owering spreads, which have been widely rolled out under the Take Control,

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Lever Brothers Pakistan Limited Becel and Flora brands. UniLever continues to look for new innovation opportunities. For instance, UniLever research into the human genome means they can now decode the make-up of skin. This can reveal such secrets as an individuals tendency for dryness or their skin protein mix. Such knowledge forms the foundation for new, more personal products. UniLevers global IT system helps them to share information around the business and to use their scale and scope to meet consumer needs and reduce their costs. UniLever drives to provide better value for customers and consumers, they have always valued the sharing of information across product sectors and geographical locations. IT has boosted this knowledge-sharing culture, allowing us to make the most of the vast amount of Information held by our people around the world. UniLevers computer networks provide over 90,000 employees worldwide with common tools for sharing information allowing them to deal with millions of electronic messages every working day. They also have a Unilever Intranet, which helps them to manage innovation and best practice around the world. Global teams, for example, pool information, marketing success stories and knowledge via dedicated sites, making this knowledge available to UniLevers people locally, wherever they are. UniLever is committed to doing business in a responsible and sustainable way. In partnership with organizations around the world, UniLever works to reduce their impact on the environment and to act as a responsible corporate citizen. Unilever believes in sustainable development meeting the needs of the present without compromising resources for future generations. This commitment begins and ends with their consumers. UniLever believes that by constantly evolving to meet their changing

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Lever Brothers Pakistan Limited needs, they can continue to develop their business in both a profitable and an environmentally sustainable way. In working towards sustainable development, they focus on three areas that are directly relevant to their business. These are fish conservation, clean water stewardship and sustainable agriculture. An example of their work in the area of fish conservation is the Fish Sustainability Initiative, which aims to meet their objective of sourcing all supplies from sustainable fisheries by 2005. Filegro, an Alaskan salmon-based dish, was our first product to come from a sustainable fishery, as certified by the Marine Stewardship Council. In clean water stewardship, as in other areas, UniLever joins with partners to achieve maximum impact. For example, through their sponsorship of the Global Nature Funds Living Lakes initiative, they work with a network of private and government organizations to help communities better manage their local lakes and wetlands. In sustainable agriculture, UniLever has set up of an expert external advisory board. Its task is to advise and inform its business and suppliers on new sustainability standards. Unilevers commitment to corporate social responsibility is an integral part of their operating tradition. It is outlined in their Corporate Purpose and in their Code of Business Principles. It finds practical expression in the worldwide standards they have set their selves: to ensure the health and safety of Unilever people at work, to secure the quality and safety of products and to minimize the environmental impact of their operations. UniLever aims to be as professional in their management of its social responsibilities as they are in any other area of business. UniLever recognize the need to be explicit about what their social commitment means in practice: to articulate their policies, and to demonstrate its performance. UniLever reports on their approach and progress in its

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Lever Brothers Pakistan Limited Social Review. Unilever has a tradition of support for the local community wherever it operates, in particular in the areas of education, environment and health. For example, in India access to oral care is limited, with few dentists per head of population. In 2000, UniLevers oral health and hygiene education programme brought advice and care to over 2.5 million schoolchildren. In China, Unilever has sponsored Qinghai provinces first Art Hope School. In a region where few can afford the cost of basic schooling, it offers the opportunity of a general education and free tuition in traditional dance, music and modern art. Internet technology is providing a two-way communication channel, helping UniLever to get to know its consumers better. Competition in markets is intense. To further develop their relationships with consumers and communicate the benefits of their brands, UniLever uses a variety of media, not only highly creative television advertising campaigns but also new one-to-one communication via the internet. UniLever brand communication has always made the news. In the 1950s, they produced the first ever television commercial in the UK. As the 21st century began, they screened the UKs first interactive TV commercials, marketing their Colmans and Olivio brands.

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Lever Brothers Pakistan LimitedLever Brothers Pakistan Limited is largest fast moving consumer Products Company in Pakistan. Lever Brothers Pakistan Limited is a part of UniLever- a global company. Lever Brothers Pakistan Limited is producing more than 50 brands in Pakistan.

Mission Statements1: We are the leading consumer product company in Pakistan, a multinational with deep root in country. 2: We attract and develop high talented people who are excited, empowered and

committed to deliver double digit growth. 3: We serve every day needs of all consumers every where for food, hygiene and beauty through brands products and service that deliver the best quality and value. 4: We strive to remain and every simple and enterprising business. 5: We use our superior consumer understanding to products breakthrough innovation in brand and channel. 6: Our brands capture the hearts of consumer through outstanding communication. 7: Through managing a responsive supply chain we maximize value from supplier to customer. 8: We are exemplary through our commitment to business ethics, safety, health,

environment and involvement in the community

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Statement of Chairman& Chief Executive of Lever Brothers Pakistan Limited I am quite convinced that 2002 is poised to be a passionate year for us, which is why we should reflect on some exciting possibilities it has to offer: Power of teamwork, based on truth and trust. Passionate pursuit to grow and win. Fun environment at work, inspired by enterprise culture. Brands which rank highest in consumers minds and hearts. System that transform the shape of our business.

The challenge for us is to liberate our energies to help grow our business, and to lead and deliver the results that we have committed ourselves to. I would encourage everyone to believe in and grasp the art of possibility and focus on the Must Wins for our business.

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Product Lines of Lever Brothers Pakistan Limited

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PERSONAL WASHTOILET SOAPS Lifebuoy (carbolic soap) Lifebuoy Gold (2 varieties) Lux (4 varieties) Rexona (3 varieties) Liril (2 varieties) Breeze

FABRIC AND HOME CAREFABRIC WASH Ultra Surf Surf micro Surf Excel Power Surf Sunlight Washing Powder & Soap Wheel HOME CARE Vim Dish Washer/Scourers Vim Bar Vim Powder

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PERSONAL PRODUCTSHAIR CARE Sunsilk Shampoo (4 varieties) Lifebuoy Shampoo Harmony Soap

SKIN CARE Fair & Lovely skin cream and lotion Ponds skin cream Ponds talc

DENTAL CARE Close-up Tooth paste Pepsodent Tooth Paste

OIL AND DAIRY BASED FOODBANASPATI Dalda

COOKING OIL Dalda Cooking Oil (Soya Bean) Dalda Sunflower oil Planta

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Lever Brothers Pakistan Limited MARGARINE Blue Band

INDUSTRIAL FATS A whole range of products for the bakery & oils for the industry.

TEALEAF TEA Yellow Label Yellow label Danedar Richbru Top Star Taaza Leaf Supreme

DUST TEA Pearl Dust Ruby Dust A1 MIXTURE TEA Taaza

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ICE CREAMCornetto (3 varieties) Feast (2 varieties)

Feast Stickless Top Ten Star Cup Callipo Split Fruiti Peddle Pop (3 varieties) 3-D Solo Polka Cup Panda Dracula Family Packs (3 varieties) (4 varieties)

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PRODUCTION UNITSDifferent factories of LBPL are operating in different areas of Pakistan. Brief information about theses units is given below: RAHIMYAR KHAN (RF) The largest and the oldest of LBPL is situated in Rahim Yar Khan. Basically at this factory personal products, soaps, glycerin and dish wash bar are manufactured. KARACHI TEA FACTORY (KF) This factory was established in 1950 and it is situated in west Wharf area. Formerly it was owned and managed by Lipton Pakistan Ltd. In the last 43 years many modifications are made here. And the factory has expanded considerably. In this factory only tea is produced and packaged. KARACHI EDIBLE FACTORY It is situated on Hub River in S.I.T.E. A&B Oil Industries established the factory in 1958 and the production of the vegetable oil began in 1962. In 1965 Lever acquired the factory. Banaspati, cooking oil and margarine are produced here and distributed all over the country. ICE CREAM FACTORY This is recently established on Multan Road in district Kasur. The plant was commissioned in 1994 having the most modern and latest machines installed. Walls Ice cream is being manufactured here. LBPL, when acquired the Polka, also purchased its two factories, one in Lahore and other in Karachi.

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Lever Brothers Pakistan Limited BEST FOODS FAISALABAD Recently LBPL has acquired Rafhan Maize Products from Best Foods International. TEA PROCESSING PLANT (MANSEHRA) The new Lever Black Tea Processing Plant has been set up at Dhodial, 12 km north of Mansehra on the main Karakoram Highway on 2.5 acres of land with the Processing Plant built-in area of 11,800 sq. ft. The plant is expected to process 50 kg per hour or approximately a ton of made tea a day. The plant has cost Rs. 11 million whereas Rs. 12 million has been spent on the building and infrastructure. The plant has been inaugurated on 7th of September, 2001.

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Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)Lever Brothers Pakistan Limited (Rahim Yar Khan Factory) is situated at Leghari road near the main city. The factory deals in major three types of products, which are categories as under: Personal Wash Personal Products Laundry and Detergents Personal wash has a wide range of soaps and the main soap of Lever Brothers Pakistan Limited is Life Buoy, Lux, Rexona and Fair&Lovely soap. Personal product include Oral (Close Up tooth paste), Hair care (Sun Silk, Life Buoy) and Creams (Fair&Lovely and Ponds). Laundry and Detergents includes Laundry (Surf Excel and Wheel) and Detergents (Vim bar and Wheel magic bar) LOCATION Location is the process of determining a geographical site for a firms operation. Organizations must weigh many factors when assessing the desirability of a particular site that can be Proximity to customers Proximity to suppliers Labor costs Transportation cost LBPL Rahim Yar Khan Factory is situated in the middle of the city. It was established in

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Lever Brothers Pakistan Limited 1948. The main reason for choosing this location for the factory was: The land for the factory was donated by the NAWAB of the Bahawalpur State. It was the ideal location to cover the Indo-Pak border areas. It was the central location of Pakistan so it was a convenient location from the distribution point of view. Availability of the cotton seeds because south Punjab is cotton area. Government tax free area Availability of inexpensive labor

PROXIMITY TO MARKETS The site of R.Y. Khan Plant was chosen in 1948. The main reason was its central location. This location is the middle of Lahore and Karachi that were the main markets at that time. So the company can easily cover whole market fro Karachi to Lahore. PROXIMITY TO SUPPLIERS AND RESOURCES At that time the company was only producing oil for which cotton area was suitable. This site was suitable for processing the raw material that was cotton and R.Y. Khan was main cotton area. TAXES AND REAL ESTATE COST It was the tax-free area. The land was gifted by the ABBASI family, so there was no real estate cost.

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Lever Brothers Pakistan Limited TRANSPORTATION COSTS Transportation cost is also a major determinant, which directs the location decision. Transportation cost is a major factor not only in terms of the raw material but also in terms of raw material. As R.Y Khan is situated at the center of Pakistan, the movement of finished goods cost minimum here across Pakistan. R.Y. Khan Railway Station is situated along with the factory so transportation through rail is very easy. AVAILABILITY OF UTILITIES The factory is facilitated with electricity, natural gas and telephone.

HistoryUnileverUnilever was formed in 1930 when the Dutch Margarine Company Margarine Unie merged with British soap maker Lever Brothers. Both companies were competing for the

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Lever Brothers Pakistan Limited same raw materials, both were involved in large-scale marketing of household products and both used similar distribution channels. Between them, they had operations in over 40 countries. Margarine Unie grew through mergers with other margarine companies in the 1920s. Lever Brothers was founded in 1885 by William Hesketh Lever. Lever established soap factories around the world. In 1917, he began to diversify into foods, acquiring fish, ice cream and canned foods businesses. In the Thirties, Unilever introduced improved technology to the business. The business grew and new ventures were launched in Latin America. The entrepreneurial spirit of the founders and their caring approach to their employees and their communities remain at the heart of Unilever's business today. Unilever NV and Unilever PLC are the parent companies of what is today one of the largest consumer goods businesses in the world. Since 1930, the two companies have operated as one, linked by a series of agreements and shareholders that participate in the prosperity of the whole business. Unilever's corporate centers are London and Rotterdam

Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)The factory site was selected in 1946. The construction of the factory started in 1949. First of all factory started the production of the Edible Oil by establishing the Edible Fats Plant in 1952. The factory started the production of soap n soapry unit in 1954. Then the company expand the business by establishing the Animal Feed Plant in 1960. Company

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Lever Brothers Pakistan Limited decided to enhance the product range and establish the Personal Product Plant in 1981. Non Soap Detergent (NSD) based on sulphonic acid, instead of conventional manufacturing of soap base on Tallow, started in 1983. Then the company decided to expansion in soapry plant in 1991. Company installed sulphonation in 1992. SITE SELECTION CONSTRUCTION STARTED EDIBLE FATS PLANT SOAPERY ANIMAL FEED PLANT PER. PRODUCTS PLANT NSD BAR PLANT SOAPERY EXPANSION SULPHONATION PLANT 1946 1949 1952-1997 1954 1960-1980 1981 1983 1991 1992

The total area of the factory is 95 acres out of which 28% (27 acres ) for factory and 63% ( 60 acres) for the Estate. 9% (8 acres) area is allocated for evaporation beds and solid waste dumping. TOTAL AREA FACTORY: ESTATE: 95 ACRES 27 ACRES (28 %) 28 60 ACRES (63 %) 63 08 ACRES (9 %)

EVAPORATION BEDS & SOLID WASTE DUMPING SITE

Organization StructureCompany Information:Board of Directors Musharif Hai Chairman & Chief Executive

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Lever Brothers Pakistan Limited Mr.Robert Zoon Mr.Parvez Hussan Khan Mr.Fatehali W.Vellani Mr.Irtiza Husain Mr.Pervaiz Mahboob Malik Mr.Soomro Mohammad Ibrahim Mr.Omar H.Karim Company Secretary Mr.Amar Naseer Auditors Messrs A.F.Ferguson & Co State Life Building No. 1-C I.I.Chundrigar Road Karachi Registered Office Avari Plaza. Fatima Jinnah Road, Karachi

Management Activities in Lever Brothers Pakistan Limited Path to GrowthIntroduced in 2000, path to growth is UniLevers corporate strategic agenda which aims to double the size of the business in seven years and to grow profits faster than the competition, thereby ensuring that we are the leaders in similar type companies in providing top value to our shareholders.

Six Strategic Thrusts

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Lever Brothers Pakistan Limited The six strategic thrusts that make up the path to growth are 1. Reconnect with Consumer By having real insights into consumer needs, preferences and future needs. This means knowing and understanding consumers lifestyles, habits and attitudes and creatively adapting brands to their changing needs. 2. Brand Focus Grow their leading international brands by concentrating our resources behind them while still supporting golden regional brands and local jewels. Innovation will be the keystone to ensuring our brands are attuned to consumers future needs. 3. Pioneer New Channels Widen their means of going to market i.e. reaching consumers and customers. This means developing new channels such as direct selling, home-vending, fashion outlets, travel, food service and out-of home. 4. World Class Supply Chain To close the gap to global world class within three years by establishing brand synergies, superior logistics and supply chain and by establishing a world program.

5. Simplify Everything that they do by reducing complexity, duplication and by making the best use of I.T. to provide high quality information once. 6. Enterprise Culture By creating a culture which shapes the mindset and actions among all employees towards winning in the market-place by building an organization fit for growth.

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TPMTotal productive maintenance is global standard of efficient production, which cuts waste, save money and make factories safer places to work. It gives machine operators the knowledge and confidence to investigate and eliminate root causes of machine error or breakdown as well as the chance to work in teams with managers to achieve improvements on product lines. UniLever started introducing TPM sometimes known as Total Perfect Management or Total People Motivation in Japan in 1989 ahead of global roll-out program. Today, around 200 sites are using TPM techniques. The level one excellent award applies simply to the factory floor, consistently excellent is for sustained performance and the special award, much harder to achieve, also includes innovation, manufacturing, sourcing and distribution.

5 Ss of Workplace Organization.The 5 Ss are a group of techniques to promote workplace organization, ensure adherence to standards and foster the spirit of continues improvement. The 1st S: Sort Objective: To get rid of unwanted items. Decide what is needed to be kept, and what is not needed and to be discarded. The 2nd S: Set Location and Limits Objective: To locate a specific place for specific items of a specific quantity, where needed. Determine addresses for materials and equipment. Put them in that place and INTERNSHIP REPORT 24

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Objective: To sustain improvements and make further improvements by encouraging effective use of the Check-Act-Plan-Do cycles. Keep all current improvements in place and develop an environment for future improvements.

Managerial Hierarchy of Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)

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Operations of Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)Material StoreMaterial store is a place where raw material is store. My period of internship is spent in material store, where I learn the different function of material store and stock maintenance. The management structure of material store is as follows: Error: Reference source not found Staff of material store is as follows. Assistant Manager Joiner Manager (Oil & Fat) Joiner Manager (Raw and Packing) SOA (On receipt of material) SOA (On issue of material) Mr.Jaffar Medhi Mr.Raza Empty Mr.Hashim Mr.Asgar

Mr.Hashim is working on the seat of joiner manager (Raw and Packing) on temporary basis. Material Store Department consists of two hangers and one perfume store. Total area of each hanger is 256 x 107 feet. Material store has an over flow depot outside the factory. Material Store Department handles near about 650 items of raw material.

Function of Material Store:Two main functions of material stores are 1. Receipt of Material 2. Issue of Material 1. Material Receipt Process: Material store receive two type of material

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Lever Brothers Pakistan Limited Oil and Fat, DFA, Liquid Caustic Packing and Raw Material The process of receiving these materials is different from each other. We will discuss these processes one by one. (a). Receipt of Oil and Fat, DFA, Liquid Caustic: The process of receiving Oil and Fat includes following steps. Step 1: Weigh Bridge: First step in material receipt system is weigh bridge where vehicles reach. Capacity of weigh bridge is 80 tons. There are two operators on the weigh bridge. The Function of weigh bridge in goods receipt process is as follows. Truck or other type of vehicle driver come on weigh bridge and gives truck invoice to weigh bridge operator which is issue by the supplier of material. The weigh bridge operator check the type of material load on truck and note the truck number and its timing of arrival. If material is packing and raw then it is sent to material store for unloading. If material is Oil and Fat tankers are sent to sampling point. Lab assistant takes sample from tanker. Operator of weigh bride makes a sample chit and then this chit is sent with sample of material to lab for inspection. Sample chit consists of date, sample no, indent no, supplier name, quality, quantity, and truck no. The operator is informed by telephone from lab that sample is ok. Then operator on weigh bridge take the first weight of loaded tanker and feed data in system with the help of software WeighBridge which includes serial number, supplier name, truck number, material name, sample no and first weight. Print of this data is attached to truck invoice. Then operator makes a weigh bridge slip and give it to driver and send driver to unloading point. Weigh bridge slip contains date,

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Lever Brothers Pakistan Limited party name, truck no, material name, and signature of weigh bridge operator. One portion of weigh bridge slip is filled by the operator on weigh bridge and other part is filled by the operator on receipt on material. The part of weigh bridge slip which is filled by the operator on receive contains received, material name, truck no, and tank no where material is unloaded. After unloading tankers come back to weigh bridge. Driver gives back the weigh bridge slip to operator and unloaded tankers are weighted. The operator feed this weight in WeightBirdge software and calculates net weight. Then print of data is attached to truck invoice. Operator checks the difference between net weight and weight written on truck invoice. If it is minor difference than it is ignored. If it is major difference than it is mentioned on truck goods receipt which operator makes after second weight. Two copies of TGR are given to driver and two for office. Truck good receipt contains following data. Supplier name, date of receipt, city name, date of sending, quantity, packing type, description of goods and truck no. Operator feed this data is daily sheet, which is made in excel. Daily sheet contains data about date of receipt, arrival time, truck no, TGR no, indent no, item code, supplier, commodity, sample no, dispatch weight, received weight, difference, out time, system posted(yes/no), remarks, weigh bridge operator. After it, the operator feed this data in MFG Pro.

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Process Map of Weigh Bridge

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Step 2: Unloading of

Oil and Fat, DFA, Caustic:

Oil and Fat, DFA and Liquid Caustic are unloaded on different point and process of unloading is different.

(b). Oil and Fat:The point where oil and Fat is unloaded is call Tallow Decanting area. Following materials are unloaded at this point. Tallow Tallow 0.5 Coronal Oil 1.5

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Lever Brothers Pakistan Limited Cotton Seed Oil

If material loaded on tanker is coronal oil and cottonseed Oil than the oil is shifted to storage tank through pipeline and with help of pump. But before shifting oil the operator on unloading clear the line with help of steam. Tallow area uses following storage tanks store the material. ST 65 and ST 12 is use to store tallow 0.5 which is use in Lux. ST 13 and ST 10 is use to store tallow 1.5 which is use for life buoy. ST 64 is use to store PK Oil. The capacity of ST 64,12,13,65 is 400 tons and capacity of ST10 is 500 tons. Temperature of storage tanks is maintained with help of hot water running in pipelines inside the tanks. A meter gage shows the level of material store in tanks. Tallow comes in two types of tankers. One is private companys tanker and others are lever brother tankers. The process of unloading these tanks is different with each other.

Private Company Tankers: Five tankers of 25 tons each can be unloaded at a time. Truck driver brings truck to tallow decanting area and give weigh bridge slip to operator on unloading. Operator note the time when unloading start. If tallow is in freeze condition in tanker than with the help of steam operator melt the tallow and then unload tallow in drop tank. From drop tank tallow is shift to Decanters. Tallow area contains two decanters having capacity of 200 tons each. Temperature of these decanters is maintained according to material. This material is than shifted to storage tank from decanters. Before shifting material to storage tank the operator on

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Lever Brothers Pakistan Limited receipt clear the pipe line to storage tank with help of steam and when line clear than material is shifted with help of pipe line. After unloading operator note time and fill the weigh bridge slip and give it back to driver. Lever Brothers Tankers (Big Belly): Company has its own tankers, which are called Big Belly. These tankers have facility to maintain the temperature of material. Material loaded in big belly is directly stored in storage tank with the help of pump. But before unloading pipeline is clear with the help of steam.

Process Map of Tallow Decanting

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W e igh Bridg e

Ta l low De ca nting Ta llo w in Big Be ll y Ta llow in Ta nke r s

Unloa ding P oint

Unloa din g P oint

Cle a r P ipe line w ith S te am

U n lo ad in D ro p T a n k

(c). DFA: Truck loading S hift Ta l low in S hift to DFA reaches S tora ge Ta nks De ca nte r s at unloading point. DFA is unloaded and store in storage Cle a r P ipe line Ma inta in tank directly from w ith S te am Te m p e ra tu re tanker with the help of pipeline and pump. (d). Liquid Caustic Cle a r Pipe line Truck loading w ith Ste am caustic reach at unloading point. Driver gives weigh bridge slip to S hift T a llow in operator. Caustic S tora ge Ta nks is first unloaded in drop tanks and from drop tanks caustic is Cle a r Pipe line shift to storage w ith Ste am tank with help of pump. Two drop tanks are use to unload the tankers. Capacity of these two drop tanks is 25 tons each. Two

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Lever Brothers Pakistan Limited storage tanks ST 66 and ST 25 is use to store the caustic. Capacity of these tanks is 150 tons each. After unloading operator fill the weigh bridge slip and give it back to driver. Process Map of DFA & Liquid Caustic Decanting

W e igh Bridge

DFA De ca n ting

Ca u stic De ca nting

(e). P oint Point Receipt of Packing and Raw Material Shift in Drop Sh ift to Packing and Ta nk S to rag e raw Tank material is unloaded in two hangers. One is S hift in hanger no 2 S tora ge where Tank s personal product packing and soapry chemicals. Other is hanger no 3 where packing soapry and raw material is stored. Truck loading packing and raw material first reach to weigh bridge where operator on weigh bridge not the truck number and time of arrival and send it to hangers for unloading. Operator on receipt of packing and raw material check the truck invoice which contain name of material, type of material, purchase order number, and quantity. Operator unloads the truck and keep material to their specific place. During unloading operator also take sample of material which is sent to lab for inspection. Operator checks the material, count it and match the quantity received with quantity written on truck invoice. After unloading material truck good receipt is prepared which contain supplier name, quantity received packing, and description of product and discrepancy. Tow copies of this receipt is given to driver and two copies are keep in office. TGR contains the following data. Supplier name, date of receipt, city name, date of sending, quantity, packing, description of goods, discrepancy if any. After TGR is issued the data is posted in Ledger. Following data is posted in ledger. Date, truck no, purchase order number, name of company, invoice number, item code, description, quantity, pack, price, GRIR no,

Unloa ding

Unloa din g

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Lever Brothers Pakistan Limited quantity ordered, and remarks. With the help on entries in ledger than data is feed in MFG Pro.

Process Map of Receipt of Packing & Raw Material

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2. Material Issue Process: Issue process of oil and fat, DFA, liquid Caustic, packing and raw material is different with each other. Issue Process of Oil and Fat: Storage tanks are kept full. Operator notes the level of material store in storage tank with the help of meter gage. Then he shifts oil and fat from storage tanks to pan room tanks. During issue he takes sample of material and makes a sample slip and send sample with sample slip to lab. After issuing operator note the level of tank. Then quantity of issue is calculated by subtracting last level noted from current level note. Then operator fills the issue sheet and makes two copies of it. One is given to operator of PAN room who is present there. Oil and fat issue sheet contains following type of data. Batch no, shift, quality, tank no, staffing, sample no, net, refinery/pan room tank no, signature of Material Store Department operator, signature of pan room operator, and remarks. Other copies are sent to office where related officer with the help of this sheet feed data in MFG Pro and makes a quality order and send it to lab. Issue Process of DFA. Operator notes the level of DFA storage tank. DFA is directly issue to PAN room from storage tank. After issuing operator check the level of storage tank and notes the difference on issue sheet. One copy of issue sheet is given to PAN room operator and other copy is send to office. Next day pan room sends an issue note to office and related

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Lever Brothers Pakistan Limited officer feed data in MFG Pro.

Issue Process of Liquid Caustic. Operator notes the level of storage tank. Level of tank is measured with help of measuring tape. After issuing operator check the level of storage tank and notes the difference on issue sheet. One copy is issue sheet is given to operator of PAN room and other is send to office. Next day PAN room sends an issue note to office where related officer feed data in MFG Pro.

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Process Map of Issue of Oil & FatStora ge Ta nk s

Ta llo w

DFA

Liquid Ca u stic Note Le ve l of Ta n k Note Le ve l of Ta nk

Sh ift in Pa n Ro om Ta nk s

Note Le ve l of Ta nk

Supply to Pa n Room

Note Le ve l of Ta n k

S upply to P a n Room


Issue S he e t


Issue S he e t

Issue S he e t Se nd in Office & Pa n Room S e nd i n Office & Pa n Room

D a ta F e e d in g in S y ste m

Send in Office & P a n Room

Da ta Fe e ding in Syste m

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Da ta Fe e ding in S yste m

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Lever Brothers Pakistan Limited Issue of Packing and Raw Material Issue of packing and raw material handle three operators. One operator issues packing material to personal product department. Second issues packing material to soapry and raw material to NSD. Third operator issues chemicals to soapry and personal product department, perfumes and colors. Issue note is sends to material store one day before issue from manufacturing departments. Related officer in store notes the name of material and quantity of issue on notebook of related operator. Next day operator note the quantity of issue on lot card from where he is issuing and notes this lot number in his notebook. With the help of fork lifter material is send to manufacturing departments. After issuing material operator notes this lot number in issue note. Related officer post this data in MFG Pro. Return of Material: Issued material can be return to material store from manufacturing departments because of two reasons. Goods not required Rejected due to any problem. If goods are returned on first base than manufacturing department send a return note with material to store. This material is stored near the lot from where it was issued. A new lot number is posted on this material. Related officer post return note in system. This material will issue first on requirement. If goods are return on second basis than first a lab assistant check the material. If material is rejected than it is stored sprat place specific for rejected material. A card which contain lot number from where it was issued and number of issue note against which it was issued is posted on this material. Related officer sends e-mail to Supplier Company. The Supplier Company inspects the material and if it is rejected than it send fresh material to company. Process Map of Issue of Packing & Raw Material

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Issue Note

O pe rator 1

Ope ra tor 2

Ope ra tor 3

Issue P a cking to P. P

Che m ica l to NS D & soa pry

Ra w S oa pry P a ckin g NSD

Issue & Note Lot Num be r

Post L ot No. O n Issue Note

Da ta Fe e din g in S yste m

Buying DepartmentThe word buying means purchase of any thing or any merchandise or item. This function is performed by buying department in any organization. Buying or purchase is one of the major functions of any company of organization. Without it no one organization can run successfully in the field of business. So we may

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Lever Brothers Pakistan Limited say that buying is the soul of company. Without buying all departments of the company will be failed. Objectives of buying department The main objectives of any buying department is to purchase merchandise and services with the object of ensuring the specification, quality, price, time of payment and timing of supplies are consistent with the overall need and objectives of the business. Functions Following functions are performed by the buying department of R.F. To buy all production raw materials including all types of material and packing material. To buy administration department requesting items. To buy all engineering requesting items (all types of machinery & spare parts). Purchase of medicine for surgery. Purchaser of W.C.S.O. seasonally for K.F & R.F. All types of factory purchases through buying department. Sales of scraped or surplus items of various department relating capital goods.

Procedure of the purchase of goods The company has maintained a fine system of buying. In fact, buying department R.F. performs its functions on local basis. But imported raw material & packing material is bought by the central buying department head office. The procedure of buying can be explained with the help of following charts: Purchase requisition

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Lever Brothers Pakistan Limited Quotations calls Summary of quotations is made Purchase order Goods receipt GRIR is prepared Store report GRIR is accepted Payment

Purchase requisition Any department which has a need of something sends purchase requisition regarding its requirement to buying department, who arranges for the purchase of required items as soon as possible. Three copies of purchase requisition are prepared. These copies distributed as follow: 1st &2nd for buying 3rd for requisitioning department (request for purchase items)

Calling summary of quotations & placing of order First of all the buying department invites to general public for quotations and to some particular parties. After receiving quotations summary of quotations is prepared and made comparison with price quality etc. After that the party is decided on which an order is to be placed according to the terms & conditions. Then purchase order is prepared in the favor of succeeded party. All information regarding delivery and freight is mentioned INTERNSHIP REPORT

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Lever Brothers Pakistan Limited in purchase order. Four copies of purchase order are prepared and distributed as follow: 1. White for accounts department 2. Pink for requisitioning department 3. Green for buying department 4. Blue for payment department Receipt of goods & preparation of GRIR When goods are received from supplier then GRIR is prepared by material store department and sends to lab for inspection. If goods are accepted in the laboratory then these are placed in the concern store other wise not. Four copies of GRIR are prepared and distributed as follow: 1st for account department 2nd for buying department 3rd for concern department 4th for laboratory In case if the material is not accepted then a sundry sales (SSA) advice or sundry sales credit will be made to return the goods to the supplier. Three copies of SSA are prepared: First for requisitioning department Second for accounts department or distribution department Third for buying department Payment When GRIR is accepted then one copy of it is submitted to payment department, where the payment department prepares payment sheet and makes advice to the cash

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Lever Brothers Pakistan Limited office for payment after satisfying the other formalities.

SUPPLY CHAIN MANAGEMENTThe firm has segmented structure of supply chain Management. The purchasing, production control and distribution departments have responsibility for material management. SITARA CHEMICALS is the supplier of local raw material of soda ash, caustic soda etc. Supplier selection is based on price, quality and delivery. SAFETY STOCK 2 to 3 weeks for basic (imported) material 2 weeks for packaging material LEAD TIME 13- 20 weeks

FORECASTINGDemand ForecastingA forecast is the prediction of future events used for the planning purposes.

Forecasting TechniquesThere the three forecasting techniques are available for the purpose of the forecasting of

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Lever Brothers Pakistan Limited the demand, which are as under. Judgmental Method. Causal Method. Time Series Method.

The usage of these techniques depends upon the availability of the data about the past.

Forecasting at LBPLThe forecasting technique, which is being followed by LBPL, is the qualitative technique.

Sales Force EstimateSales force estimate of forecasts compiled by the members of the companys sales force (their dealers in each region) about the future demand of the product. They are using this technique because they believe that their estimates are correct since the dealers are much near to the market. Marketing Department is actually involved much in forecasting. They observe the trend of the market and they set their target of sale then they tell to the production that what is their target then production department make productions according to the target set by marketing department.

Time SeriesDemand for the future periods is also determined by the time series method. Historical data about the past demand is the basis for the time series. The data is used for the demand projection for the coming periods.

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Marketing ResearchMarketing research is also conducted by the firm. Data obtained is used to determine the customer demand pattern, and trends.

Effective CapacityIt is the maximum output that a process or firm can economically sustain under normal conditions. When operating close to peak capacity, a firm can make minimal profits or even lose money despite high sales levels. Operations manager must examine the three dimensions of capacity before making capacity decisions: Sizing capacity cushions Timing and sizing expansion Linking capacity and other operating decisions

The capacity cushion is the amount of reserve capacity that a firm maintains to handle sudden increases in demand or temporary loses of production capacity it measures the amount by which the average utilization falls below 100 percent. CAPACITY CUSHION = 100% - UTILIZATION RATE (%) Another issue of capacity strategy is when to expand and by how much there are two extreme strategies: The Expansionist Strategy, which involves large infrequent jumps in capacity. In this strategy organization remains ahead-of-demand. The Wait and See Strategy could be to follow the leader, expanding when others do. Management may choose one of these two strategies or one of closely linked to strategies operate between these extremes. Capacity decision should be considered throughout the

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Lever Brothers Pakistan Limited organization. When managers make decisions about location, resource flexibility and inventory, they must consider the impact on capacity cushions. Capacity cushion buffer the organization against uncertainty as do resource flexibility, inventory and longer customer lead times. If a system is well balanced and a change is made in some other decision area, then the capacity cushion may need changes to compensate. The categories and sizes of the soaps manufactured at RF are given below:

Hard Soap

LIFEBUOY( Red & White)

140gms. 95gms.

TOILET SOAPS

LUX

PINK PURPLE GREEN WHITE

140gms & 95gms

LIFEBUOY GOLD Pink & White 140gms 95gms

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Lever Brothers Pakistan Limited BREEZE 85gms

LIRIL FRESH RAIN FRESH Main point about the capacity are given below Capacity is measured in terms of output. Measuring unit is per ton Sizing capacity cushions are used for the capacity Planned lead-time for changing a dice is 8 hours. 4 lines are available for the hard soap (lifebuoy). Capacity of per line is 210 tablets / min. Shift production is 40 tons / shift Daily production is 120-tons/ day with 3 daily shifts. For toilet soaps 3 lines and 5 machines are available.

140gms 95gms

Capacity for toilet soaps is 190/ min while the average capacity is 180/ min. Annual production capacity for life buoy is 30000 tons to 35000 tons. Utilization = Avg. Capacity/ Capacity

Utilization for toilet soap is 95% Utilization for hard soap is 97% Effective capacity Peak Capacity

Utilization for toilet soap is 90% Utilization for hard soap is 93%

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Cost DepartmentThis department provides very useful services to the company and is responsible for costing of the products. This department does the yield calculations of the followings: Soapery fatty acids Crude glycerin Refined glycerin Edibles

For the calculation of yield, these elements are taken into consideration: Storage loss/gain Bleaching loss Packing loss/gain Un-accounted loss Storage Loss/Gain When oil and fats are received by the material store, sample is taken for measuring percentage of Free Fatty Acids (FFA) and moisture. All these materials are received by the stores and then issued to production department. At the quarter end, cost department do the stock taking of all the tanks of oil and fats and also draw a sample for determining moisture. Now the cost department see that what is the difference between the physical n=and book stock. This deference will be the loss or gain and charged to the production account.

Bleaching Loss/GainFor the purpose of bleaching the Activated Earth is used. The Activated Earth absorbs some amount of tallow. This absorption is called bleaching loss. Cost department

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Lever Brothers Pakistan Limited calculates this loss.

Packing Loss/GainWhen the finished products are packed some packing loss or gain took place at this stage. Some products are packed above the standard weight and some less. Packing loss or gain is also determined.

Un-Accounted LossSome losses are not seen in manufacturing process, these are called Un-accounted losses.

Reports of Cost DepartmentCost department looks into the yield and performance of the factory with the help of various reports. These are following: 1. Daily stock report 2. Production accounts 3. Daily production report 4. Power & Steam production report

1.

Daily Stock Report This report tells that how much raw material is transferred to plant, what is the

weight of activated earth used, how much fats are spoon-fed, soap cleaned, lye transfer to glycerin section, lye treated and refined glycerin effected into drums. With the help of these information, this department takes care of yield.

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Lever Brothers Pakistan Limited 2. Production accounts of the products Cost department makes production accounts of all products with the help of followings: Raw material cost chemicals Packing material Variable direct material

Raw material cost Value of material consumed is taken from consumption schedule and is charged to production accounts after making adjustment of opening and closing stock. Chemicals Cost of chemicals and taken from consumption schedule and prorated on products pack wise and in these cases whose closing stocks are chemical mixed value is charged to production accounts after adjustment in opening and closing stock. Packing material Packing material but is taken from consumption schedule and then total cost is charged to production accounts of the products.

Variable direct material It is just as packing material but at present crude glycerin stock has accumulated hence we have to keep variable chemicals value equivalent to its weight in stocks. Steam and power are taken from variable direct schedule in total against their location but same case with crude glycerin, which has been explained, in variable direct

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Lever Brothers Pakistan Limited chemicals. 3. Steam Weekly steam production report is received and from these quarter reports are prepared. Meter reading of all steam main meter and sub-meter are done at quarter end. Cost of steam is calculated and transferred to all the production departments where steam is used. Cost of burners used in factory is subtracted from total Sui gas bill. Power Meter reading of WAPDA main meter, and own generator and sub-meter in the factory are done at quarter end. Power is allocated on all factory location on the basis of sub-meter; the technical management gives the standard bases. The cost of power is changed to production accounts. 4. Daily production report The reports of daily production are submitted by the production department to cost department. This report helps in watching what is the production of certain product on certain day, and how many transferred to warehouse and what is the present balance on department floor. Power & Steam production report

Cost control documents preparationFollowing documents are prepared for cost control purpose. Standard yield vs. Actual yield Standard chemical valuation vs. Actual chemical which is used in production Standard stem & power vs. Actual steam & power

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Lever Brothers Pakistan Limited Standard man hours vs. Actual man hours Calculation of variable cost of sales Cost department prepares daily, monthly and annual cost reports. These reports are used by the management for control purpose whether the cost is according to the standards are not. The area of difference is pointed out and a better control is exerted for the future. It is also important because if a company is able to lower its production it works more than to increase the market share. It is easy for a company to lower its cost because it is in its own control while the market is beyond the control of management. In Lever Brother the cost of sales is calculated in a very simple way according to the standards of accounting. The report starts with the opening stock of Material, Steam/Power and Distribution. In these opening stocks the cost of oil and fats which comes from oil & fat consumption report, the chemical cost which is obtained form chemical consumption report, cost of packing material obtained of packing material consumption report, cost of steam/power obtained from steam/power consumption report, for that day production is added and it gives variable cost of production. From this variable cost of production the closing stocks of material, steam/power and distribution that day is deducted which gives total cost of sales.

Payment DepartmentDifferent department of LBPL R.F are working under Commercial Department. Payment Department is one of them. Payment Department is also called APV (Accounts Payable Vouchers). The purpose of this department is to make the arrangements for the payments of the factory liabilities. INTERNSHIP REPORT 53

Lever Brothers Pakistan Limited APV section is further classified into two sections APV 1 APV 2

APV1APV 1 is classified into further three sections: Packing and materials payment section Local payment section Chemicals and engineering stores payment section

Functions of APV 1 Following functions are performed by APV 1 department: 1. Local payment: Local payment includes: Engineering stores items (spare parts) Repair of building Items of canteen, mess, entertainment etc. Wash white of building Medical bills of non-management staff

2. Payment of oil & Facts 3. Payment of utilities bills 4. Payment of packing material 5. Payment of chemicals and perfumes 6. Payment of stationery and printing INTERNSHIP REPORT 54

Lever Brothers Pakistan Limited 7. Payment of medicine 8. Allocation of head office debt and credit notes. 9. Preparation and submission of weekly and monthly Statements through advance tax system.

APV 2APV 2 makes a payment of wages and salaries for the workers of LABPL Rahim Yar Khan Factory. Functions of APV 2 Following function are performed by APV 2 Payroll relating to are permanent, temporary, badli and apprentices Payments to all contracted employees Payments to all transporters and other contractors

Wages & Salaries Employees of the company are divided into two groups: 1. Management 2. Non-Management Staff Every department of production sends a location sheet to account department in which it mention that how many hours have been spent on each location. The APV 2 also receive information about the over time etc. on the bases of these information it prepares salaries sheet and submits to APV 1 for making cheques. APV 1 prepares cheque or salary sheet and sends to Muslim Commercial Bank Limited RYK. That bank is situated within the premises of LBPL R.F. Non-Management salaries and wages are paid by the MCB Rahim Yar Khan.

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Lever Brothers Pakistan Limited MCB is rendering very useful services to the company and its employees. For salaries of management, R.F. receives debit note from the head office because salaries to the management are paid by the head office. All managements salaries are transferred to managers bank accounts. Wages of workers are paid on 3 rd, and management on 21st of every month.

Process of Wages & salaries Flow charts:Error: Reference source not found

Procedure of payment All payments have the similar procedure. When any department of the factory INTERNSHIP REPORT 56

Lever Brothers Pakistan Limited want to purchase any item for production, repair etc. then it sends requisition to the buying department. These items can be purchased from R.Y.K. as well as from other cities of the country and some items are also imported. Those items which are purchase from RYK are called local purchases and the payments of such items are known as local payments. When goods are bought from outside R.Y.K. such purchases are known as outside purchases and payments of such purchases are called out side payments. APV section makes the payment sheet at that time when it receives the following documents: Purchase order GRIR accepted Invoice from supplier

Purchase order is send by the buying department to APV. GRIR is submitted by the requisitioned department (Who request to buying department for the purchase of item). Invoice is send by the supplier to the payment department. If the GRIR has been accepted by the concerned department then payment department will prepare the payment sheet/payment voucher. The payment sheet includes the following information: Party code number Reference number If payment through cheque then the cheque number Bank name Classification number

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Lever Brothers Pakistan Limited Gross amount payable Tax deduction (according to various rates) Net amount payable With the help of above information if amount is Rs.150 then payment is made on cash voucher. When this amount is more than Rs.150 then payment is made through cheque. When payment is made through cheque then requisition for cash office is generated through system with the help of payment sheet. The requisition is prepared by the computer automatically. The system also mentions the cheque # on the monitor that is also written down on the payment sheet. After that payment sheet is submitted to the cash office. The cash office prepares the cheque through computer. The cheque is send to authorized person for authorization of payment. After that if the payment is required to make through D.D/T.T then D.D/T.T is prepared. The cheque is posted or given by hand to the respective supplier. The suppliers get the amounts from the banks of LBPL. In this way the payment is made to the respective supplier. After making the payments to the concerned persons the cash office sends the payment sheet to APV. The payment department has various registers. One for local purchases, one for outside purchases, and one for engineering sores items and so on. All the information is transferred to respective registers. In register there is companys name, companys code, address, phone # etc. if there is no name of a company then its name is written down In the register and then information are transferred to the register. Capitalization of Capital Proposal In a year four Times capitalization procedure is completed. At The end of each

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Lever Brothers Pakistan Limited quarter capitalization of Capital Proposal is done by the Capital Proposal Account Department. For various head of accounts, Company has mentioned various numbers of Capital Proposal just like as 91/L/101 92/L/301 93/L/306 94/L/308 Assets Transferred advice: Assets transferred advice is that memorandum which is used to transfer various assets from one location to another location. So we may say that it is inter Unit advice. Four copies of ATA are prepared, of their authorization; one copy is send to Account Department and others to respective departments. Booking authority: It is the permission of journey. When any employee travels for company business or for personal matters then he or she has to take the permission from some person who has been authorized by the company to give the permission to such person for business purpose. Traveling facility is provided to Management and Non-Management staff (Junior Manager and above). After this when certain person comes back, he sends a Traveling Expenditure Statement with his signature, to A.M. Accounts Department. Booking authority is affiliated of this traveling approval from authorized person. Summary of Credit Sales of POD/Estate Shop For factory employees including all management and non-management, certain

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Lever Brothers Pakistan Limited companys manufactured goods are sold to them on subsidy like as soaps, Ghee, Wheat, tea etc on concision rates. For this purpose one shop has been opened by Company in Lever Estate named POD or Estate Shop. From POD shop daily Cash Sales Summary is received with cash memo to the Accounts Department. At the end of each month one JV is passed for this subsidy and charged to. This summary Is prepared according to book month because it is internal transaction of the company. Locum Tenses Authorities: This is a memorandum which means transfer of responsibilities to another responsible person. When one manager goes on leave then he sends a copy of locum tenses authority to accounts department that now this person is responsible for my job. Working capital: To know the financial position of the business each month of the financial year working Capital report is prepared. With the help of Working Capital Report, company knows how much capital is circulated in business. And also know that how many accounts receivable, accounts payable and inventories exist. Two copies of Working Capital report are prepared. One is sent to head office monthly basis while second is for office use. Over Head Expenditure report: To control the repair expenses of the factory Over Head Expenditure Report is prepared on monthly basis. All locations mentioned in workshop, for example Worker Administration Department, for their salary, traveling expense, building of the workshop administration department all revenue expenditures are Called overhead Expenditure

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Lever Brothers Pakistan Limited report. After obtaining this report one JV Is passed by Accounts Department according to various a/c # and locations.

Month End Work Order report: This report is received from R.F. Engineering Department. It shows the detail of that work done on repair and maintenance, in other words those expenses which incurred on repairs and maintenance up to at the end of each month. This final report is send by Engineering Department to Accounts department. Against this report Accounts Department prepares two JVs; one for Capital Proposal Administration Department while second against various locations. Reconciliation Reconciliation functions are also performed in financial section. Following Reconciliation Statements are prepared in this department. Reconciliation Statement Between Walls Ice cream and Rahim Yar Khan Factory Reconciliation Statement Between Engineering stores & Payment section Reconciliation Statement between Karachi Tea Factory (KTF) Reconciliation Statement between Karachi edible oil The & Ghee Factory Reconciliation Statement between Head office and R.F Reconciliation Statement between Brook Bond And R.F

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Employees Relations DepartmentThe assets of the organization like machinery. According to the Personnel

Department of LBPL R.F., there are things which are common between workers and machinery of the organization. For examples: Machinery requires repair where as workers required training. Both are used for production purposes. Both require improvement. Both become inefficient if proper attention is not given.

There are many Departments which work for different areas. Such as Production Department works for the controlling of production. Sales Department works for the sale of Products. Finance Department arranges the finance for the organization and so on. Therefore there must be a department for the controlling, motivation and training of the employees. For this purpose LBPL R.F. has an Employees Relation Department. The Personnel Department of LBPL R.F. performs the following functions:

Functions Employment Transfer and Promotion Training Compensation Administration

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Lever Brothers Pakistan Limited Health and safety Benefits and Services Maintain relations with labor Human Resource planning Employment: Personnel Department makes arrangements for the recruitments of the employees. For this purpose it collects information about the desired employees functions and then defines the job requirements and job profile. The Personnel Department makes all the arrangements for the report meant of new employee, It sees better such employee is available in the organization or not. In case of no, it gives the advertisement in the newspapers. It also collects all the applications of the applicants. It also makes arrangements for test. The Personnel Department uses different tests for different applicants. After that it arranges the interviews for the succeeded applicants. Usually the interviews are bland of different types of interviews. These interviews include panel interview, structured questions etc. The background information about the succeeded applicants is also gathered by the Personnel Department. Transfer and Promotion: The Personnel Department transfers the workers from one department to other department according to the circumstances. The function of promotion of the workers is also performed by this department after consulting with the top management and analyzing the past record of the workers. Training: For smooth production and efficient work there must be some training programs

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Lever Brothers Pakistan Limited for the workers, staff and management. Training function is also performed by the Personnel Department. It provides on the job training to the existing workers and arranges programs for new employees. The Personnel Department provides the following training facilities to management, staff and workers. On the job training Lectures Seminars Conferences

The company has a full time training manager who conducts the different training programs according to circumstances. The management is also sent abroad for certain training programs. Compensation and Administration: The Lever Brothers Pakistan Limited conducts the wages survey in the market and of the major competitors after every two years and compares the results with its own package and there is any difference then adjustment is made. The desire of LPBL R.F. is that its employees must be satisfied in every aspect because It has the opinion that satisfied employees are more productive as compared to dissatisfied. The LBPL gives 30 different types of allowances to its employees. Some of these are annual, some are semiannual, and some are monthly while some are once in the whole employment period. Health and Safety: LBPL R.F. is much conscious about the health and safety. Proper equipments are available in all areas of the production where sensitive machinery is in operation.

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Lever Brothers Pakistan Limited Furthermore, the organization has a well equipped Medical Center where MBBS doctors are available in order to meet with emergency cases. The Personnel Department provides all possible instruments to all workers and it has the desire that every worker should use those instruments in order to avoid losses. Following are the Instruments which are provided to the workers: Long shoes Helmets Gloves Fire Instruments

Benefits & Services: LBPL R.F. also provides certain benefits and services to all its employees. A list of some benefits and services is given below: Attendance Allowance Good attendance award Death Compensation Canteen allowance Tea Expenses Conveyance Allowance Family medical allowance Family medical care House rent Allowance Utilities allowance

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Lever Brothers Pakistan Limited Meal Allowance Rehabilitation Allowance Retirement Jersey Shoes Tonga Allowance Traveling Announce Hajj Marriage Assistance To minorities

The organization has a club for the employees of the organization. Indoor and outdoor facilities are also available. The company also celebrates Annual Sports Day on which different games are played and prizes are given to the succeeded players by the company.

Human Resource Planning:The most important function performed by the department is the Human Resource Planning. For a smooth production there must be an effective Human Resource Planning. For This purpose it makes long term and short term plans to make the labor available for production. Short term Plans are made for those places where workers have gone on holidays or absent. Under these plans it has two types of recruitment: 1. Badli 2. Temporary For long term plans workers are recruited from the temporary workers who have become skilled one. INTERNSHIP REPORT 66


Motivation:The organization has the opinion that motivated workers are more productive than unmotivated workers. To motivate its employees the organization uses both intrinsic and extrinsic approaches for motivation its employees. Intrinsic Approach: Job rotation

Extrinsic Approach Training Appreciation letters Bonuses Cash awards Gifts Shields Clocks Put the name of the workers on the notice board who perform an excellent performance. To motivate the employees the organization has introduced a program name OFI (Opportunity For Improvement).

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ADMINISTRAITION DEPARTMETNTLever Brother Pakistan R.F. has also an administration department that is controlled by the personal department. Following functions are performed by the Administration Department: Arrangements for providing for providing transport facility to management staff. Arrangements for the journey of management & non-management staff. Arrangements of stationery and printing. Issuance and maintenance of stationery record. To provide entertainment to management during working hours. Receipts and dispatch of letters, documents etc.

Transport Facility to Management StaffUsually the management staff has to go to Head Office Karachi for business matters then they need transport. This arrangement is made by the administration department. The company has its own transport for drooping and leaning of management staff at the Air Port, or Railway Station.

Arrangement for JourneyWhen a Manager, Assistant Manager or any Junior Manager wants to go outside the city either for personal or business purpose, they inform to the administration

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Lever Brothers Pakistan Limited department about their intention. They instruct to the department for making the arrangements of journey. An arrangement of journey includes reservation of seat in train or in airplane as the case may be. After making such arrangements the administration department informs to the concerned person about the reservation and other information.

Purchase of stationery & printing of desired documentsStationery includes pen, paper, pencils, rubber, sharpener, etc. all these items are purchased by the administration department. It sends the purchase requisition to the buying department for the purchase of desired items. The administration department also prints all these documents, vouchers invoices sheets etc. which are used by various department of the company.

Issue of stationeryAll stationery is issued by the administration department to various departments of the company. It also maintains the record of such stationery. Administration department prepares reports about the issuance of stationery on monthly basis.

Maintenance of BuildingArrangements of the repair and maintenance of factory building is made by the administration department.

Entertainment FacilityTea is provided to all management during working hours in order to keep the staff fresh and to improve their efficiency. All arrangements for entertainment are performed administration department. Arrangements for entertainment includes purchase of milk, sugar tea etc.

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Receipt and dispatch of mailThe administration department receives mail and distributes it to the relevant person. In the same way it dispatches all the mail of the company. Mail is made through OCS, TCS, or postal method.

DISTRIBUTIONNow a days business is extended to a great extent. Markets are widening briskly, so there is a great need to meet the requirements of this large market successfully. There should be such a system of distribution that the supply of products to the markets should be according to the needs; this system should be sales loss proof. Lever Brothers has a system, which gives maximum results. Supply of product is monitored in such a way that there are minimum chances of shortage in supply.

FUNCTIONSIn LBPL RYK Distribution department performs falling functions: Receives finished products from production departments. Receives monthly or weekly Plans for distribution from Marketing & Sales Department HO. To makes daily dispatch plan. To arrange transport facility for delivery of products. To pay Excise Duty and arrange Provision for Excise Duty according to legal Requirements.

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Lever Brothers Pakistan Limited To pay Sales Tax liability at the end each month up to 20th day of next month. And some Misc. General Functions.

DISTRIBUTION PROCEDUREFirst of all production is transferred to distribution warehouse by the production department. Distribution department has two warehouses, which are capacity wise 700+150 tons (for soap and personal products) and 500+200 tons (for cooking oil. Distribution department arranges the dispatch plan that is provided by the consumer services head office. Therefore products are dispatched according to the dispatch plan. Company has various sales depots located in different cities throughout the country. Such as:

Faisalabad Karachi Wazirabad Lahore Rahim Yar Khan (central) Rahim Yar Khan (south) Dera Ismail Khan Multan INTERNSHIP REPORT 71


Distribution department sends products directly to distributors or to sales depots as per instruction of sales department head office. Sales department makes sales contracts with different parties and supply by advising distribution in Rahim Yar Khan Factory. All sales depots are controlled by head office. Sales department send plans for despatch to these depots which take necessary action according to plan. Rahim Yar Khan South depot covers the area of Baluchistan and Sind while Central covers the area of Punjab and NWFP. There is another depot named over flow depot in Rahim Yar Khan. When there is shortage of space in factory warehouse, production is transferred to this depot. Distribution department Rahim Yar Khan Factory sends despatch plans to over flow depots. This depot arranges the supply accordingly. For all the despatches a despatch advice is prepared in which the full detail of the products are maintained. Five copies of despatch advice are prepared. One copy is sent to consignee through transporter. One copy of D.A is sent to customer service head office. One copy is sent to accounts department. One is for distribution department Rahim Yar Khan One copy is given to transporter that is called acknowledgement.

DISTRIBUTION CHANNELSLBPL has a centralized distribution system in which the products are distributed from one warehouse to the selected distributor of the company, and then the

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Lever Brothers Pakistan Limited distributor make the product available to the wholesalers and at the end the product is transformed to the retailers to be purchased by the final customer. The company had direct relations only with the distributors for making the product available to the target market. It deals with the distributors on net and advance payment bases and does not give any credit facility to them. However the company provides different commissions incentives. There are many certified distributors of LBPL operating in almost all major areas of the country. Sometimes when the company introduces the same product line in different innovation style then it uses the following channel of distribution. The company has specifically directed its distributors to provide that innovative products to retailers skipping out the wholesalers in the channel. The basic reason for doing this was to eliminate the wholesaler commission so that the price can be placed at relatively lower level. Channel is like this Manufacturer (LBPL) Consumer Company warehouse Retailer Distributor

In short the intense coverage of market is the basic aim of LBPL distribution policy.

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QUALITY CONTROLQuality is the use of techniques and activities to achieve, sustain and improve quality. It involves integrating the following related techniques and activities: 1. Specification of what are needed. 2. Design of the product or service to meet the specifications. 3. Production or installation to meet the full intent of the specification. 4. Inspection to determine conformance to the specification. 5. Review of usage to provide information for the revision of specification if needed. 6. Utilization of these activities provides the customer with the best product or service at lowest cost. The aim should be continuous quality improvement.

OBJECTIVES OFI Opportunity For Improvement Always looking for improvement.

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Lever Brothers Pakistan Limited The continuous improvement of all services through total involvement of all employees. The developing and the strengthening of partnership with external and internal customers and suppliers. Providing innovative and higher quality products and services to achieve total customer satisfaction by understanding their requirements and anticipating their future expectations or needs.

FUNCTIONS Monitoring annual targets for quality improvements in all areas. Creating a culture of customer focus striving to become the lowest cost producer through agreed annual cost reduction program. Value people by understanding and drawing upon their strength i.e. abilities and knowledge and make efforts for their training and development.

STAGESRAW MATERIAL: When raw material is received the quality of raw material is inspected according to the standards. According to these standards if the personnel of receiving department will inspect according to the standards. If there are a lot of 500 and they choose 13 samples from the whole lot then they select the sample from the upper and lower and right and left side of the whole packet. It means that they select the sample by way of diversifying the area. If the 2 units of the sample are rejected then the whole lot will be rejected and if the lot is rejected then they call back the vendors and vendor check that lot

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Lever Brothers Pakistan Limited again. If the lot is very much needed by the production department then they place a written request. The 100% inspection is done on it. In this case, they call the vendors or their inspectors and they check it on 100% basis. But this happens in very rare cases. On the other hand if the lot is accepted then it is remarked as GRL (good received lot) and sent to the store. While four copies of GRL are made and sent to the following four departments: 1. Purchase Department 2. Quality Control Department 3. Store 4. For computer entry DURING THE PROCESS: When the product is in-line then quality inspector check it at every stage of process. If these inspectors will sign it for next process then product will go for next process. If they do not sign it then the work will stop. Then for the accepted and rejected production, the quality inspector will give report. This report has also included the sign of supervisor of process area. So that analyzing the rejection and acceptance %age for next rectification and improvement. Then report will pass to the production manager so on this base they can make the weakly and monthly report. And it will pass to the top management. In this inspection is done at every stage and will pass towards the top management. The ISO has given them standard for the whole process. It also includes the initial cost but the running cost is more safe and effective because the chances of rejection are reduced. We can say that the chances of rejection will be controlled. In this way the quality level is much improved and it reduces the customer complaints. Monthly charts are also made and management also takes correction actions. INTERNSHIP REPORT 76

Lever Brothers Pakistan Limited If there is a need of corrective action then they will request. The immediate action will be taken on that form and until the corrective action will not be taken they production level will be ceased. Quality control department has given their dimensions. And if there is any deviation from these dimensions then even the MD of the company cannot start the production. And charts are also following these dimensions everywhere in the production area.

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Financial analysisFinancial Highlights Six months ending Reference 30.6.01 Sales Rs.'000s Profit after tax Rs.'000 Dividends Rs.'000 Shareholders' equity (or Net assets) Rs.'000 Number of shares 000s 1 2 9,642,559 623,270 31.12.00 10,790,801 843,209 30.6.00 9,717,415 495,905 31.12.99 9,426,775 415,168 30.6.99 9,939,479 348,792

3

498,520

1,103,869

438,698

332,586

332,347

4

1,383,352

1,258,602

1,517,879

1,538,483

1,451,690

5

13,294

13,294

13,294

13,294

13,294

Key Financial Benchmarks Sales per share (Rs) Net profit margin (%) Eps (Rs) Dividend per share (Rs) Dividend payout (%) 6=1/5 725.33 811.70 730.96 709.10 747.67

7=1/2

6.46%

7.81%

5.10%

4.40%

3.51%

8=2/5 9=3/5

46.88 37.50

63.43 83.00

37.30 33.00

31.23 25.00

26.24 25.00

10=3/2 79.98%

130.91%

88.46%

80.11%

95.29%

11=4/5 104.06 Book-value per share (Rs) Return on equity (%) 12=2/4 45.06%

94.67

114.18

115.73

109.20

67.00%

32.67%

26.99%

24.03%

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Sales:The company's revenue streams are reported under three heads: foods, beverages, and detergents (including personal-care products). The foods group covers brand names 'Dalda Banaspati' and 'Planta' cooking oil, and 'Walls' and 'Polka' icecream. The beverages group covers brand names 'Lipton' and 'Brooke Bond Superme' tea. The detergent covers 'Surf' and 'Vim'. Personal care products includes 'Lux', 'Lifebouy' soap and 'Sunsilk' shampoo. During 1H01 the company introduced new food packagings which resulted in greater volumes. The icecream units did well because of enhanced product visibility made possible by door to door mobile vending. The overall sales under foods head improved by Rs. 22m (1H01: Rs. 2,612, 1H00: Rs. 2,590). Lipton Yellow Label is the principal brand alongwith Brooke Bond Supreme in beverages. The biggest threat to its

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